“Losing savings, jobs and houses has been devastating for many. Something else was lost — trust in major banking systems,” the Bank of Canada governor said Monday in a speech in London, Ont.

“It has been said that, ‘Trust arrives on foot, but leaves in a Ferrari’.”

Mr. Carney said global banking reforms, launched by the Group of 20 nations in the aftermath of the 2007-08 financial meltdown, can only go so far to regaining that trust.

“Virtue cannot be regulated,” he told an audience at the Richard Ivey School of Business at Western University. “Even strongest supervision cannot guarantee good conduct. Essential will be the rediscovery of core values and, ultimately, this is a question of individual responsibility.”

Virtue cannot be regulated

Mr. Carney, who is stepping down as central bank governor in this country to take on the same duties in Britain, took a professorial tone to lecture banks on the “Five Cs” of corporate governance.

High on that list is sufficient bank capital, which the Basel III accord — the result of a push from the G20 —provides in a framework and timetable for global institutions. “Many people remember the pivotal movement when Lehman Brothers collapse, but that was only an example of a widespread failure of banking models across advanced economies,” he said.

“Gallingly, on the eve of [other bank failures of state rescues] . . . every bank boasted of capital levels well in excess of the standards of the time. So, it should be no surprise when building a more resilient system, the first priority was to strengthen the bank capital regime.”

Mr. Carney — also chairman of the Swiss-based Financial Stability Board, charged with pushing through those reforms — said institutions also need to address issues of clarity, as well as restoring “capitalism to the capitalists,” and connecting with clients.

Finally, he said “core values” must be at the centre of any reforms. This is “the responsibility of the financial sector and its leaders. Their behavior during the crisis demonstrated that many were not being guided by sound core values.”

“When bankers become detached from end-users, their only reward is money, which is generally insufficient to guide socially useful behaviour.”

Mr. Carney’s remarks come from a perspective of relative success in Canada’s financial system — seen as one of the healthiest and well-regulated in the world —that managed to avoid many of the problem faced elsewhere, such as the United States and Europe.

Mr. Carney’s reputation as a strong central banker will be tested greatly when he becomes governor of the Bank of England in July. The U.K. was hard hit by the financial crisis and still faces huge obstacles to reforming bank operations and supervision, in which Mr. Carney will have the lead role.

When bankers become detached from end-users, their only reward is money

However, his unfinished business in Canada includes propping up a faltering economy.

Speaking to reporters after his speech, Mr. Carney acknowledged the economy late last year was likely “softer than we had forecast,” pointing to a “rotation” away from household spending toward growth propelled by business investment and export growth.

“More of the elements of the downside risks [to economic output] have materialized than the upside risks,” he said. “I would say, particularly around the fourth quarter . . . [growth] might be softer than we had forecasts.”

He said that rotation “is the fundamental challenge, or dynamic, in the economy right now. And we’re going to see some choppiness in the data, potentially, until that rotation is affected.”